I’m going to go out on a limb here and say that if you want to run a professional web service of any sort, you should *never* use leased servers. There. I said it. I can hear the objections coming now, so I’ll address them:
1) Leased servers are cheaper than cloud. As a cloud provider, I’ll have to agree that the cost of a leased server is cheaper than cloud services for the same amount of CPU. However, the cloud technologies available from many vendors today only allocate what you actually use, which means you need a *lot* less CPU to run your app than you would reserve with leased servers taking into account both growth and peak load. That’s good for the earth (less CO2) and you can share the savings with your friendly cloud provider who has the technology and knowledge to bring you the service. All this ignores the other huge cost of leased servers which is the staff required to care for them. Both WordPress and Digg have spent a lot of money on salaries that wouldn’t have been needed if they’d purchased cloud services.
2) Leased Servers are under my control. Well, how much control can you truly exert? Most growing companies and startups can’t hire or retain the level of expertise – or develop the level of experience – that a cloud provider can since they’re aggregating demand and leveraging economies of scale. That skill and experience is what “controls” the servers to keep them running successfully. At a cloud provider, one well-trained engineer can keep 1000 servers running at 4-nines. Can you? Just being able to see the hardware and turn it on and off doesn’t give you control: knowing how to manage it so it stays up and keeps your web site running successfully is the measure of control that you care about!
3) I can arrange leased servers in a way that gets me better performance and reliability than the cloud. Well, if you believe this, then you haven’t looked around at all the cloud providers there are out there. Some of them offer virtual private data centers that can out-perform anything a corporate IT department can cook up – because they have the visionaries and engineers to do so. Amazon is NOT the standard against which Cloud should be judged. Amazon has done a great job of making cloud cheap and accessible to programmers. They haven’t focused on performance, uptime, manageability, or transparency. You have to look elsewhere for that.

I think Matt’s comments simply indicate that even the best and brightest in the industry are still confused about what Cloud is and isn’t. In my view it is a way to aggregate demand for a data center run under a highly automated virtualization management

Now I agree that you can’t grow bigger than your competitor by using your competitors software. Thats why I think its silly to see tech companies using MS since they like to compete with everybody on everything. But I’m just not getting the anti-Amazon feelings here.